Bid win: JPMorgan acquires First Republic Bank

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As “MarketWatch” reports, citing the FDIC, the major US bank JPMorgan Chase was successful in its bid for the Frist Republic Bank and will take over the US regional bank. It is not known how high JPMorgan’s bid was.

First, the US deposit insurance FDIC trustee of the institute, as the California financial regulator DFPI announced on Monday. In the next step, JP Morgan will take over First Republic with all deposits and practically all assets. In mid-April, deposits totaled $103.9 billion, with the total of all assets amounting to around $229.1 billion. All of Frist Republic Bank’s customers would have full access to their deposits, and all of the bank’s branches would reopen as JPMorgan Chase on Monday, according to the US agency, the news site said.

The FDIC had given potential bidders a look at the books of the Frist Republic Bank over the weekend. Originally, an agreement was to be announced before the start of trading in Asia on Monday, but this was delayed somewhat. With JPMorgan, a major US bank has now been awarded the contract, which had already supported the troubled bank together with others with a capital injection in March.

According to “Yahoo Finance”, however, JPMorgan needs an exemption from the US government for the takeover, since US banks are normally not allowed to make takeovers that would allow them to collect more than 10 percent of US deposits. JPMorgan is the largest US bank and is already above this threshold according to “Yahoo Finance”.

Shares in First Republic Bank were temporarily suspended from trading on Friday after falling more than 50 percent to a record low. Since the collapse of the Silicon Valley Bank (SVB) and Signature Bank, the money house has been struggling with the fact that many customers have withdrawn their money. The background to the problems was the sudden rise in key interest rates.

Despite an aid campaign by the largest US financial institutions in coordination with the Treasury Department and the Federal Reserve, the situation remained precarious.

Editorial office finanzen.net / dpa-AFX

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